* Copper imports at 350,000 T vs 380,000 T in May
* H1 imports rise 25.9 pct yr-on-yr to 2.52 million T
By Polly Yam
HONG KONG, July 10 China's copper imports fell 7.9 percent month-on-month in June, dropping as Chinese banks reduced lending for metals imports following a probe into an alleged metals fraud at Qingdao port.
Arrivals of copper anode, refined metal, alloy and semi-finished copper products stood at 350,000 tonnes in June, their lowest level since April 2013, data from the General Administration of Customs showed on Thursday.
That was down from 380,000 tonnes in May when inflows dived 15.6 percent from the month before.
In the first half of 2014, imports rose 25.9 percent year-on-year to 2.52 million tonnes, the data showed.
The month-on-month fall in June was in line with market expectations. Traders said trading of copper stocks in China's bonded zones came to a virtual halt and banks froze lending for metals imports when news of the alleged fraud came to light in early June, cutting demand for spot imports.
The fall in June is due to the Qingdao case, which virtually brought trading to a halt," said Zhou Jie, trading manager at China International Futures (Shanghai) Co Ltd.
"Even now, banks are very cautious in giving letters of credit for copper imports," said Zhou, who expects imports to stay weak in July.
The suspected financing fraud at Qingdao port centred on a local company that allegedly used multiple warehouse receipts for the same metal cargo to obtain financing.
A China-based trader who works for a Western supplier said some term shipments of refined copper scheduled to arrive Shanghai in June had been diverted to South Korea.
A source at a large factory which uses refined copper to manufacture semi-finished copper products said one Japanese copper supplier had bought bonded stocks in Shanghai and delivered the stocks to his company as term shipments in June, cutting the supplier's China-bound shipments.
Importers increased spot refined copper purchases later in the month, but traders said the buying was not sufficient to offset the fall earlier.
Reflecting demand for imported refined copper, premiums for bonded stocks in Shanghai fell to near one-and-a-half years lows of about $55-$70 in mid-June and the premium rebounded to $90-$115 at the end of month, traders said.
(Reporting by Polly Yam; Editing by Joseph Radford)